Cigarette Price (2012)Most popular local brand is Vinataba costs 0.83 USD per packMost popular foreign brand is Craven costs 0.86 USD per pack

The nominal prices of cigarettes have increased from 1998 to 2009 for three selected representative cigarette brands: most expensive brand, 555, most popular brand, VINATABA, and cheapest brand, Thang Long. Despite these increases in the nominal prices of all three types of cigarettes, their real prices (adjusted for inflation and compared to the base year of 1998) have not increased correspondingly, remaining generally unchanged with a downtrend over the same period, indicating the growing affordability of tobacco.

The nominal and real prices of three cigarette brands (1998-2009)

Cigarette Affordability

A declining trend in estimates of Relative Income Price (RIP) between 1998 and 2009 also indicate that cigarettes have become steadily more affordable to smokers over the past decade, where an increasingly lower percentage of per capita GDP was used to purchase 100 packs of all three cigarette brands: most expensive brand, 555 , most popular brand, VINATABA and the cheapest brand, Thang Long. This was attributed to the progressive growth in real per capita GDP in Vietnam by four-fold between 1998 and 2009, while the nominal price for all the three brands increased only two-fold.

Relative Income Prices (RIP) of three types of cigarettes, 1998- 2009

Tax Impact Scenario

Based on the simulation model, increasing the excise tax rate by 5%, 10%, 20%, 30%, 40% and 50% would immediately increase total tax revenue by 5.2% (VND 10,134 billion), 10.3% (VND 10,625 billion), 20% (VND 11,559 billion), 29.3% (VND 12,455 billion), 38.2% (VND 13,312 billion) and 46.9% (VND 14,150 billion), respectively. Notably, the additional revenues from any excise tax increase are much more than the revenues collected in 2009 alone (VND 9,633 billion). The simulated tax scenarios further suggest that a 5% to 50% increase in excise tax rate has the potential to reduce overall cigarette consumption (3,500 million packs in 2009) by 1.5% (52.5 million packs) to 12.4% (434 million packs), respectively. At the same time, an increase of 50% in excise tax has the potential to reduce smoking prevalence from 23.8% to 17.2%, a significant decline of 6.6% or 1,009,800 lives saved from premature tobacco-related deaths. In comparison, a 5% increase in excise tax rate would reduce smoking prevalence by only 0.8%.Thus, tobacco excise tax rates must be raised and maintained significantly high to reduce cigarette affordability and effectively reduce tobacco consumption.